The UK’s finance ministry is set to release new regulatory frameworks concerning cryptocurrencies and the use of blockchain technologies across its jurisdiction. Alongside this, government officials have been in talks with key crypto industry firms such as Gemini, a crypto exchange founded by the Winklevoss brothers.
According to an initial report from CNBC, the country’s Finance Minister, Rishi Sunak, is expected to announce the new frameworks in the coming weeks.
“Treasury officials have shown a willingness to understand the complexities of the crypto market and so-called stablecoins, digital assets that derive their value from existing currencies like the U.S. dollar,” claimed an industry insider with knowledge on the matter.
Reports indicate that the new regulatory framework from the Treasury will be focused on stablecoins. Talks with crypto firms such as Gemini, which issues its own stablecoin, the Gemini dollar, and other key players in the stablecoin sector have begun. The new regulatory regime is also said to focus on anti-money laundering (AML) and countering-the-financing-of-terrorism (CFT) measures. The UK’s financial watchdog, the Financial Conduct Authority (FCA), will reportedly play a role in these plans as well. The UK’s move to regulate the cryptocurrency space comes as other jurisdictions have already begun to take action. The European Union (EU) is also mulling over new regulations concerning cryptocurrencies and blockchain technologies.
Stablecoins are a type of cryptocurrency that are pegged to another asset, typically fiat currencies like the US dollar, to help reduce volatility. Stablecoins, hence, represent a more stable manner of exposure to cryptocurrencies as a payment vehicle. Stablecoins have become a popular choice for those looking to use cryptocurrencies for payments and other transactions due to their stability, and firms like Circle, Gemini, Tether, and Terra are among the leading figures in terms of stablecoins.
The UK’s Treasury has been increasingly active in the crypto space in recent months. This year, the department launched a consultation on the use of crypto and created several initiatives on central bank digital currencies (CBDCs) in the hopes of formulating a so-called digital Pound that would be an equivalent and parallel utility to the country’s fiat currency.
In a similar vein, the Bank of England (BoE) has laid out its proposal for the UK’s regulatory framework for crypto assets, the first of its kind in the country. The BoE has since given banks until June 3rd this year to make crypto plans in place, as UK regulators also provide new capacities and regulations.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
